Insights MENA

Economic Outlook

The Central Bank of Egypt (CBE) plans to auction 1.675 BN USD worth of one-year dollar-denominated T-bills on 19th of November 2018 compared to one-year dollar-denominated worth 1.73 BN USD issued in 2017. The CBE added that the auction would be settled on 20th of November and is open to local banks and foreign financial institutions.

The Central Bank of Egypt (CBE) left its key overnight interest rates unchanged by keeping the deposit rate at 16.75% and the lending rate at 17.75% in order to contain inflationary pressures in the economy. Egypt annual urban price inflation increased more than expected in October 2018, reaching 17.7% compared to 16% in September 2018.

The Egyptian Ministry of Finance has collected 6.3 BN EGP during the first phase of exemptions from late filing penalties up to 90% and has closed more than 50,474 files after reconciliation with a total value of 12.5 BN EGP, noting that the second phase began with exemptions up to 70%.

The General Authority for Supply Commodities (GASC), Egypt state grain buyer, has received offers from 11 suppliers in its first international rice purchase tender of 2018. GASC was seeking short or medium grain milled white rice of any origin and has asked traders to submit 2 kg samples of their grains for a cooking test.

The Ministry of Housing in Saudi Arabia represented by the Sakani program, signed fiveagreements with four real estate development companies to build 19,359 housing units in Riyadh, Jeddah, Buraidah and Alkhobar for Sakani beneficiaries. Murooj Jeddah will include 10,000 housing units, Luluat Al-Bahar in Jeddah 8,000, Tanal in Riyadh 1,008, Areen in Alkhobar 273, and Basateen Al-Qassim in Buraidah 78. It is worthy to mention that all the housing units are villas and townhouses.

A trade delegation from the National Bank for Services and Public Works (BANOBRAS), the most important development bank in Mexico visited Saudi Arabia to strengthen trade partnerships with their counterparts in Mexico and participate in promising opportunities and investment projects in various areas, especially in the construction and infrastructure sectors.

UAE government has set no minimum limit for tourists' VAT refund, which came into effect in Sunday 18th of November 2018. The daily maximum VAT cash refund for tourists has been capped at 10,000 AED (2,722 USD) but if the refund claim exceeds that amount, then the funds will be transferred electronically to the tourist.

Abu Dhabi Fund for Development (ADFD), attended the inaugural ceremony of the 2.3 BN USD landmark infrastructure project of a high-speed train service connecting the cities of Tangier and Casablanca in Morocco reducing the travel time to two hours. ADFD contribution to the 200-km long, 320-km/hour high-speed train amounted to 140 MM USD.

The annual house price growth in Dubai has declined by 5.6% in October 2018. The monthly change in October 2018 recorded 1.2% compared to a slight fall of 0.3% in October 2017. House prices in Dubai are expected to continue declining further until the end of 2018 and into the start of 2019.

The International Monetary Fund (IMF) announced that Qatar GDP growth is projected to reach 2.4% by the end of 2018 compared to 1.6% in 2017 due to higher energy prices. In addition, the IMF forecasted a further rise in GDP growth reaching 3.1% in 2019 adding that the country's foreign exchange reserves expected to record 36 BN USD (131 BN QAR). It is also expected that Doha will introduce a value-added tax (VAT) by the end of 2019 or early 2020.

Kuwait tourism sector has been steadily receiving several applications for construction of new hotels, resorts and hotel apartments, which is an indication that commercial and tourism activities in Kuwait are flourishing.

Global oil markets are increasingly over-supplied with light distillates, such as gasoline, while there are not enough middle distillates, such as diesel, which has opened a big price differential between the two fuels. To keep meeting healthy demand for mid-distillates, refiners are processing high volumes of crude and creating a surplus of gasoline.

Political Events

The Saudi Ambassador Dr. Abdullah bin Nasser Al-Bussairy, has met Philippines former president Gloria Macapagal-Arroyo in order to strengthen bilateral relations between the two countries by the establishment of a Philippine-Saudi Arabian inter-parliamentary friendship association especially in the light of the passage of the Bangsamoro Organic Law (BOL) to increasetrade and other cooperation.

Egyptian President Abdel Fattah al-Sisi attended Libya conference Hosted by Palermpo, Italy to find ways to stabilize Libya in turmoil since the toppling of Muammar Gaddafi in 2011. This was Sisi's first visit to Italy since the disappearance of Italian postgraduate student Giulio Regeni in Cairo in 2016.

The newly established labor courts in Saudi Arabia announced that it will not accept claims that are more than 12 months old after the termination of the contractual relationship between the employer and employee. Under the amendment, the courts will consider such cases only if the claimant was able to provide a valid excuse acceptable to the court for the delay in filing the lawsuit beyond a period of 12 months or if the defendant raises no objection to the right of the aggrieved party to file a lawsuit at any time.

Air traffic at Kuwait International Airport is still temporarily suspended due to unstable weather conditions hitting the state. Almost all arriving flights are being redirected to Saudi Arabia Dammam and Riyadh airports, and Bahrain Manama airport. All departing flights have been delayed and passengers have been informed about the new schedules.

Stock Market

.ADI banking sector increased led by Union National Bank (UNB). On the other hand, real estate sector declined led by Eshraq Properties.

.DFMGI real estate sector declined led by Arabtec Holding.

Dubai Financial Market (DFM) announced that its listed companies have recorded a 100% compliance regarding the disclosure of Q3-2018. However, the total number of UAE companies as well as the dually-listed companies, which disclosed their Q3-2018 results, reached 64 companies.

Note: Weekly values are calculated on Thursday of each week.

Companies Transactions

Merger market, the leading provider of M&A data and intelligence, announced that Egypt M&A deal value soared to 1.5 BN USD with 14 deals in total in 2018, overtaking 2017 which had only 10 deals worth 389 BN USD. The bulk of this value came from the energy, mining and utilities sector, which saw two of the biggest deals of 2018 Mubadala Petroleum's acquisition of a 10% in the Zohr oil field from Eni; and SOCO International's acquisition of Merlon Petroleum El Fayum Company.

Abu Dhabi state fund Mubadala Investment Company's oil business has agreed to buy a 20% participating interest in Egypt Nour North Sinai Offshore Area concession from Italy Eni. Eni, which operates the concession through a subsidiary, holds an 85% interest in partnership with Tharwa Petroleum Company, which holds a 15% interest.

The Sharjah FDI Office (Invest in Sharjah), the investment promotion agency of Sharjah, has focused on increasing business opportunities with 80 industry experts and businesses from 20 European countries during its participation in the 'Going Global' event which was held in London on 14th and 15th of November 2018.

In Saudi Arabia, Emaar became Saudi Arabia most recommended brand among current and former customers compared to being ranked number five in 2017. Emirates which was at the top of the list in 2017, is ranked the second in 2018, while AlBaik moved up to the third spot in 2018 from sixth in 2017.

In Saudi Arabia, Bank Aljazira announced the launching of the new "Currency Card" that includes five currencies in one card; the US Dollar, Euro, British Pound, UAE Dirhams and Saudi riyals, and can be issued with a low credit limit where a customer can transfer money to the card easily and quickly at any time, through Aljazira Phone or Aljazira Online.

Kuwait Oil Company has signed contracts worth 1.3 BN USD (4.2 BN KWD) to import drilling towers. The contracts have a tenor of three years and can be renewed for another two years.

Boursa Kuwait has announced the launch of an Over the Counter Market (OTC), a new trading platform for those companies that are not listed on the bourse. OTC transactions will be carried out through licensed brokerage offices working under Capital Market Authority bylaws and Boursa Kuwait rules for the OTC market.

Qatar Islamic Bank (QIB) has announced its sponsorship of the 5th Information Security Conference for the Financial Sector (ISFS). The conference is organized by Qatar Central Bank (QCB) and took place between the 18th and 19th of November 2018 at the Sheraton Grand Doha Resort & Convention Hotel. This year, the conference is themed under the title "Securing Digital Assets" and will focus on information security in Qatar, infrastructure improvements and solutions for all vital sectors related to information security.

Sports and Culture

Mohamed Salah struck a fine 90th-minute winner as Egypt defeated rivals Tunisia 3-2 on Friday Africa Cup of Nationsqualifier at the Borg El Arab Stadium, Alexandria. Naim Sliti opened the scoring in the 14th minute for Tunis, but Trezeguet levelled the match for the hosts just after the half-hour mark. Baher El Mohamady fired Egypt ahead on 60 minutes, but Sliti thought he had rescued a point for the Carthage Eagles with his second in the 72nd minute.

The Saudi Public Investment Fund (PIF) has deniedinterest in acquiring Manchester United Football Club. Reports by British media recently claimed that Manchester United is a target for investment by Saudi Arabia, which is valued at 3 BN GBP (British Pound). However, an official in the sovereign fund announced that these reports are not accurate.

There are speculations about the French star Paul Pogba's move to Catalan from Manchester United, where Pogba has had a rough relationship with Jose Mourinho after being spotted with Lionel Messi in Dubai. Both Messi and Pogba are coming out of respective injuries and are not involved with their national teams during the two-week international break thus the two are enjoying their holidays in Dubai.

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